Gi­ant Mer­ck bud­dies up with lit­tle KalVista on lead drug, ig­nit­ing stock with a $760M deal

Phar­ma gi­ant Mer­ck $MRK is buy­ing in­to mi­cro cap biotech play­er KalVista $KALV, bag­ging an op­tion on a lead drug and out­lin­ing a rich po­ten­tial fu­ture for the com­pa­ny if all goes ac­cord­ing to plan.

The US/UK hy­brid biotech, which start­ed the day with a $72 mil­lion mar­ket cap, saw its for­tunes change in­stant­ly as news spread that Mer­ck was pay­ing $8.50 a share for a 10% stake in the com­pa­ny. Its shares rock­et­ed up as news spread that Mer­ck is al­so pay­ing $37 mil­lion up­front to bag an op­tion on KalVista’s drug for di­a­bet­ic mac­u­lar ede­ma, KVD001.

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